China's trade surplus slumped in November as exports unexpectedly fell while the country is working on the details of a "phase one" deal with the U.S., customs data showed.
Exports from China dropped 1.1% on an annual basis in November to $221.74 billion, contracting for the fourth straight month, while imports to the country rose for the first time since April with a 0.3% increase to $183.01 billion.
The consensus estimates of economists polled by Econoday was for a 0.7% annual rise in exports and a 2.5% drop in imports. The country's trade surplus narrowed 7.5% year over year to $38.73 billion, against market expectations of $44.5 billion.
In yuan terms, China's exports increased by 1.3% year over year to 1.57 trillion yuan, while imports rose 2.5% to 1.29 trillion yuan. The country's trade surplus decreased by 4.1% to 274.21 billion yuan.
For the first 11 months of the year, China's exports rose 4.5% to 15.55 trillion yuan, while imports stood at 12.95 trillion yuan, the same as the previous year. The trade surplus increased by 34.9% to 2.6 trillion yuan in the said period.
Exports to the U.S. dropped 8.4% to 2.64 trillion yuan in the January to November period, while imports declined by 19.5% to 763.05 billion yuan, amid an ongoing trade war between the two countries. The trade surplus with the U.S. decreased by 3% on an annual basis to 1.88 trillion yuan.
In dollar terms, global Chinese exports ticked down 0.3% to $2.26 trillion in the first 11 months of 2019, while imports dropped at faster 4.5% to $1.88 trillion, increasing the surplus by 28.4% to $377.6 billion.
There is likely to be room for imports to improve in the near term, as companies adjust to lower growth expectations, said Tommy Wu of Oxford Economics. "The pickup will likely be modest given our expectation that the domestic economy will slow further, and that the external outlooks will remain challenging," he said in a note.
"The tariff rollbacks that may form part of the "Phase One" trade deal won't materially alter the outlook," said Julian Evans-Pritchard, senior China economist, and Martin Rasmussen, China economist, at Capital Economics, adding, "We think that subdued global growth will keep export growth weak."
China's manufacturing activity registered growth for the first time in six months in November on the strength of new orders. The next set of U.S. tariffs on Chinese goods is supposed to take effect in a week.
As of Dec. 6, US$1 was equivalent to 7.04 yuan.